US-Iran deal Highlights: IMF remains on ‘high alert’ over war fallout after Washington-Tehran preliminary deal

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Iranian Deputy Foreign Minister Majid Takht-Ravanchi said on Tuesday that US Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf would attend the signing of the memorandum of understanding between Tehran and Washington in Switzerland.

Five people were injured and three buildings were damaged in an explosion in Iran’s western city of Borujerd on Tuesday, said the city’s fire department chief.

Nader Mousavand said the blast took place in a building in the city and caused damage to nearby structures.

He said an initial assessment indicated the explosion was caused by accumulated municipal gas.

Iran’s top diplomat was quoted as saying Tuesday that the end of the Iran war included the end of Israel’s occupation of Lebanon.

Iranian state television quoted Foreign Minister Abbas Araghchi making the comment to foreign diplomats in a briefing. It did not air the remarks, but put them in an onscreen graphic.

“The end of the war in Lebanon is an inseparable part of complete end of the war,” Araghchi was quoted as saying. "Without the withdrawal of Israeli forces from the territories they occupied during this war, the war has not fully come to an end.”

He said further Israeli attacks on Lebanon “will be considered by us a violation of the Memorandum of Understanding.”

– AP

Iran's Foreign Minister Abbas Araghchi said on Tuesday that ending the war in Lebanon was the "most important issue" in the peace deal with the United States announced the day before.

"The important point I want to emphasise here is that in our view, there are two parties to this memorandum -- one side is America and Israel, and the other side is Iran and Hezbollah," said Araghchi during a briefing with foreign diplomats broadcast on state television.

"This is perhaps the most important issue in the memorandum -- the declaration of an immediate and permanent end to the war on all fronts, including in Lebanon," he said.

– AFP

European shares inched up at open on Tuesday, following a rally in the previous session, as investors assessed the preliminary agreement between the U.S. and Iran, weighing prospects for the resumption of oil supplies through the Strait of Hormuz.

The pan-European STOXX 600 index edged 0.3% higher to 636.01 points by 0717 GMT, with the industrial goods & services index's 1.2% rise leading gains.

The benchmark closed at a record high on Monday following a premliminary agreement between the U.S. and Iran to end the three-month long conflict and reopen Strait of Hormuz, a crucial global oil supply route.

Oil prices extended declines on Tuesday, with Brent Crude trading near $82 a barrel, easing some concerns over inflation that had pushed expectations of further monetary tightening.

— Reuters

An Iranian delegation led by central bank chief Abdolnaser Hemmati has departed for Moscow to discuss “monetary and banking relations between Iran and Russia,” Iran’s semiofficial Fars News Agency has reported.

During the visit, the delegation is expected to focus on ways to “facilitate monetary exchanges”, boost cooperation between the two countries’ central banks and develop new mechanisms to bolster the overall volume of economic exchange, the Fars said.

Republicans on Capitol Hill said Monday they need more information about the agreement between the United States and Iran announced by President Donald Trump, and some are expressing scepticism as they ask the White House for details.

The agreement announced Sunday to end the war in Iran, set for a ceremonial signing Friday in Geneva, is centered around reopening the Strait of Hormuz and lifting the United States' naval blockade in the region, along with financial incentives for Iran if it meets certain benchmarks.

But Senate Republicans and Democrats who returned to Washington on Monday said there were still many unanswered questions about the deal and they need thorough briefings before it is finalised.

"I just don't know enough about it," Senate Majority Leader John Thune told reporters in the Capitol. "Even the people who follow this stuff closely up here don't know that much about it."

"If it's a secret deal then how can I take it seriously?" asked Republican Senator Thom Tillis of North Carolina.

— PTI

Wall Street’s biggest banks are cutting their oil-price forecasts for the coming quarters, as optimism grows over a revival of Middle East crude output following an interim deal to reopen the Strait of Hormuz.

Morgan Stanley and Goldman Sachs Group Inc. both announced lower guidance for crude prices in the final quarter of this year, citing the sooner-than-expected resumption of flows from the Persian Gulf. Goldman expects a full recovery as early as the end of next month.

The bank sees Brent at $80 per barrel in the final quarter, compared with a previous forecast of $90, it said in a note. Morgan Stanley sees Dated Brent, a benchmark for physical markets, averaging $90 a barrel in the third quarter, down from a previous prediction of $100, and $80 in the final three months.

“Much is still to be negotiated and key risks remain, but for now, this is a key step towards a de-escalation of the conflict and higher oil exports via the Strait of Hormuz,” Morgan Stanley analysts including Martijn Rats said in a note, citing the interim deal between the US and Iran.

— Bloomberg

Shipowners are unlikely to resume sailing through the Strait of Hormuz for several weeks, as they await clearer evidence that the US-Iran agreement will have a lasting impact on security in the region, Mitsui OSK Lines chief executive Jotaro Tamura told the Financial Times in an interview published on Tuesday.

Tamura said shipping companies would need more than a diplomatic breakthrough before feeling confident about returning to the strategic waterway.

"What will have to come in place is not just a simple agreement between the relevant countries, but it has to be material and translated into the real situations in the Strait of Hormuz, so that shipping lines can make themselves comfortable to go through," Mitsui OSK's Jotaro Tamura said.

Saman Rezaei, the head of Iran’s merchant marine union, mentioned he thinks the transit system in the Strait of Hormuz will “never return to its pre-war condition”, in the situation of the eventual end of the crisis

“For centuries, the strait has been a safe haven for merchant shipping, but this war has shattered the previous order and structure, and we will have to wait for a new order and a more effective role for its coastal states,” he told Al Jazeera.

The International Monetary Fund said it remains on “high alert” over fallout from the Middle East war on the global economy, warning that energy supplies will take time to recover even as the US and Iran announced an agreement to reopen the Strait of Hormuz.

“That the global economy is so far weathering the shock is cause for reassurance — but not complacency,” IMF Managing Director Kristalina Georgieva wrote in a blog post published Monday. “Commodity prices, inflation and expectations for it, and financial conditions have all been impacted,” she said, “but not yet in ways that signal a global slowdown.”

– Bloomberg

BlackRock Inc.’s Rick Rieder said the surge in US equities following President Donald Trump’s Iran peace deal announcement reflects investors starting to redeploy the roughly $8 trillion to $9 trillion held in money market funds.

“There is so much cash that’s sitting on the sidelines,” said Rieder, BlackRock’s global fixed income chief investment officer. SpaceX’s initial public offering last week had already forced investors to make room in portfolios, creating momentum that accelerated after the Iran agreement removed a key geopolitical risk, he added.

“Once that has happened, all of a sudden it unlocks this cash, particularly when you get a good piece of news and people say, ‘gosh, I can get into the pool.’ And it’s pretty explosive when you see it happen,” Rieder said Monday in a Bloomberg Television interview.

– Bloomberg

A proposed agreement aimed at ending tensions between the United States and Iran brought some relief to investors on Monday, boosting sentiment across equity and bond markets. However, the development created fresh uncertainty for prediction markets, as per Bloomberg.

Polymarket, one of the world's largest event-based betting platforms, has recorded more than $345 million in wagers tied to forecasts on whether and when Washington and Tehran would reach a peace agreement.

India' stock benchmarks are set to extend gains at the open on Tuesday after rising about 3% in the last two sessions, boosted by a preliminary peace deal between Iran and the U.S., which triggered a sharp drop in crude prices.

GIFT Nifty futures were trading at 23,939 as of 7:50 a.m. IST, indicating that the benchmark Nifty 50 would open above Monday's close of 23,853.90.

Other Asian markets traded flat, while Wall Street equities closed higher overnight. [MKTS/GLOB]

— Reuters

The United States said Monday that ships will move toll-free through the Strait of Hormuz under an Iran peace deal signed by President Donald Trump, and insisted Tehran would have to fulfill its commitments before getting any economic benefits.

They included a possible $300 billion reconstruction fund for the war-battered country, but the release of funds will be "tied to performance," a senior Trump administration official said in a call with reporters.

— AFP

Pakistan left its benchmark interest rate unchanged on Monday as policymakers balanced inflation risks stemming from the Middle East conflict against a moderation in economic activity.

The State Bank of Pakistan held the benchmark rate at 11.5%, according to a statement, as predicted by 22 of 39 analysts surveyed by Bloomberg.

The country’s macroeconomic outlook remains broadly unchanged despite emerging global and domestic risks, the central bank said in a statement, while warning that inflation is likely to remain in double digits over the next few months before easing gradually.

In that context, “the current monetary policy stance remains appropriate to guide inflation towards the target range of 5% to 7% over the medium term,” it said.

– Bloomberg

Jeanne Shaheen, the top Democrat on the US Senate Foreign Relations Committee, has urged the administration to provide lawmakers with an immediate briefing on the details of the preliminary agreement President Donald Trump reached with Iran, reported Al Jazeera.

“Congress must be immediately briefed on the terms of this agreement,” she said, noting that any nuclear accord would undergo congressional review as mandated by law. While welcoming the shift toward diplomacy as “long overdue”, Shaheen argued that the conflict’s primary objectives remained unfulfilled.

“President Trump did not have a plan going into the conflict on how to end it,” she said, pointing to his “ever-shifting statements”. She also contended that the United States had been weakened by the conflict, citing the deaths of 14 service members and rising inflation at home.

“There’s no question that America’s position is weaker now than at the beginning of the conflict,” she said.

French President Emmanuel Macron on Monday welcomed the newly signed US-Iran memorandum of understanding (MoU), describing it as a significant step toward resolving concerns over Tehran's nuclear programme and promoting stability in the global economy.

Speaking during a high-level meeting with US President Donald Trump on the sidelines of the G7 Summit in Evian-les-Bains, Macron said the agreement represented an important breakthrough in efforts to reduce tensions in West Asia.

"I think yesterday what was signed was a very important Agreement - Peace Deal with Iran. It is a very important one because, first, it will fix the nuclear issue. It is a very important matter for peace for the whole world," Macron said.

— ANI

US President Donald Trump on Monday (local time) said Iran has committed to "never have a Nuclear Weapon" under the newly announced peace agreement, while rejecting reports that Washington would provide USD 300 million to Tehran as part of the deal.

In a post on Truth Social, Trump reaffirmed his administration’s stance that the agreement would prevent Iran from developing nuclear weapons. He also dismissed claims of a US payment to Iran, calling them unfounded.

"Iran has agreed to never have a Nuclear Weapon! Also, the story that the US is paying Iran 300 million Dollars is Fake News, put out by the Dumocrats!!!" Trump wrote.